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TMI Blog1997 (8) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... b). Section 35B allowed at the material time deduction of a sum equal to one and one-third times of the amount of such expenditure incurred during the previous year. In order to get this kind of deduction, the onus lies heavily on the assessee to prove that the expenditure falls within any of the purposes set out in the various sub-clauses of clause (b) of section 35B(1). Merely because some activities took place outside India that will not qualify the expenditure for the deductions mentioned in section 35B. If the State Trading Corporation incurs expenditure for an advertisement or publicity outside India, the assessee will not be entitled to any deduction unless the assessee can establish that the advertisement or publicity was being done outside India for and on behalf of the assessee and in respect of goods the assessee deals in or provides in the course of his business. Likewise, if the State Trading Corporation maintains a branch office or agency for the promotion of sale outside India, the assessee cannot claim any deduction on account of maintenance of such branch office or agency but if such branch office or agency is maintained by the assessee himself for the promotion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal. The case is remanded back to the Tribunal. The assessee will have an opportunity to establish his case before the Tribunal to claim deduction. The appeal is disposed of. Civil Appeals Nos. 1465 of 1981 and 1466 of 1981 : The appeals are dismissed. Civil Appeal Nos. 1624-25 of 1988 : The following question of law was referred to the High Court by the Tribunal : Whether, on the facts and in the circumstances of the case, the assessee is entitled to weighted deduction under section 35B of the Income-tax Act for the assessment years 1975-76 and 1976-77 ? Whether, on the facts and in the circumstances of the case and (i) since the foreign buyer had through the Indian agent located the assessee, (ii) the commission had been paid in India the assessee is entitled to weighted deduction under section 35B(1)(b)(ii) or (iii) or both ?" The expenditure which qualifies for deduction under section 35B(1)(b)(iii) will have to be expenditure incurred outside India in connection with distribution, supply or provision outside India of such goods, services or facilities. No deduction under section 35B can be allowed to the assessee for expenditure incurred in India in connec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d remand the case back to the Tribunal. The assessee will have an opportunity of proving the nature of the expenditure and establishing that the expenditure falls within any one of the sub-clauses of section 35B(1)(b). It has to be remembered that the onus is on the assessee to establish the facts to obtain the deduction claimed. The appeal is allowed with the above observations. There will be no order as to costs. Civil Appeal No. 9105 of 1994 : It appears that the Tribunal did not examine the claim of the assessee by reference to any of the sub-clauses of section 35B(1)(b). No expenditure can be allowed under section 35B generally. The assessee must be able to establish the facts to prove that the expenditure falls within the ambit of sub-clauses (i) to (ix) of clause (b) of section 35B(1). This has not been done. We are of the view that the appellate order of the Tribunal has to be set aside. We set aside the order of the High Court as also the appellate order of the Tribunal and remand the case back to the Tribunal. The assessee will have an opportunity of proving the nature of the expenditure and establishing that the expenditure falls within any one of the sub-clauses of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and examining the law applicable. There is no point in calling for a reference of this case at this stage. The Tribunal must examine the case afresh in the light of the observations made in C.A. No. 2365 of 1994. The onus is on the assessee to prove that he was entitled to the expenditure by reference to the various sub-clauses of section 35B(1)(b). The expenditures cannot generally be allowed as claimed. We set aside the order of the High Court as also the appellate order of the Tribunal. The appeals are allowed. No order as to costs. Civil Appeal No. 3200 of 1995 : It appears that the Tribunal did not examine the claim of the assessee by reference to any of the sub-clauses of section 35B(1)(b). No expenditure can be allowed under section 35B generally. The assessee must be able to establish the facts to prove that the expenditure falls within the ambit of sub-clauses (i) to (ix) of clause (b) of section 35B(1). This has not been done. We are of the view that the appellate order of the Tribunal has to be set aside. We set aside the order of the High Court as also the appellate order of the Tribunal and remand the case back to the Tribunal. The assessee will have an oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Act, 1961, the Appellate Tribunal was right in law in allowing weighted deduction on the whole of the E.C.G.G. charges ? " The High Court was also in error in not calling for a reference in this case. In the case of Addl. CIT v. Gurjargravures P. Ltd. [1978] 111 ITR 1, this court held that when a claim under section 84 was neither made before the Income-tax Officer nor before the Appellate Assistant Commissioner, the Tribunal was not right in entertaining that claim and allowing it in favour of the assessee. In view of the above facts, we are of the opinion that the decision of the Tribunal was erroneous and the same is set aside. The appeal is allowed, there will be no order as to costs. Civil Appeal No. 4106 of 1995 : The appeal is dismissed. There will be no order as to costs. Civil Appeal No. 6411 of 1995 : The Tribunal overlooked that in order to qualify for deduction the expenditures must have been wholly or exclusively incurred for the purposes mentioned in clause (b) of section 35B(1). The order of the High Court under appeal is set aside. The appellate order of the Tribunal is also set aside. The appeal is allowed. Civil Appeal No. 6715 of 1995 : The followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the appellate order of the Tribunal. The appeals are allowed. There will be no order as to costs. Civil Appeal No. 8482 of 1995 : The Revenue has not advanced any argument except on question No. 1 which is as under : " 1. Whether, on the facts and in the circumstances of the case, and on a proper interpretation of section 35B of the Income-tax Act, 1961, the Appellate Tribunal was right in law in allowing further weighted deduction in respect of expenses under various heads including ' travelling ', ' service charges/commission to various agencies ', ' expenses on foreign delegation in India ', ' bank interest on packing credit ', ' subscriptions ' ' commission and brokerage ' and on proportionate expenses under other heads like ' salary ', ' telex, telephone and telegram ', ' postage ', ' printing and stationery ', ' electricity ', ' Jamnagar office expenses ', ' bank charges ', etc. ? " The Tribunal was clearly in error in allowing this claim for weighted deduction without examining the claim. The assessee has also failed to adduce any proper findings and make out a proper case under clause (b) of section 35B(1). In that view of the matter, we are of the opinion that the ..... 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